Formation of Company Q. By whom the
qualification shares are subscribed?
Ans: - The directors of the company
subscribe the qualification shares.
Q. How many signatories
are required for the Memorandum of Association of a public Limited Company?
Ans: - Seven members are required to sign
the Memorandum of Association of a public limited Company.
Q. How many signatories
are required for the Memorandum of Association of a Private Company?
Ans: - Two members are required for the
Memorandum of Association of a private company.
Q. When can a private
company commence business?
Ans: - A private company can commence
business after obtaining Certificate of Incorporation.
Q. When can a public
company commence business?
Ans: - A public company can commence
business after obtaining certificate to commence business.
Q. What documents specify
the objectives of the company?
Ans: - Memorandum of Association
specifies the objects of the company.
Q. Which document is
issued by a company to invite public to purchase its shares?
Ans: - Prospectus is issued by a company
to invite public to purchase its shares.
Q. What is a company?
Ans: - An association of a number of
individuals for the purpose of carrying on some legitimate business.
Q. How many signatories
are required for the Memorandum of Association of a public Limited Company?
Ans: - Seven members are required to sign
the Memorandum of Association of a Public limited Company.
Q. How many signatories
are required for the Memorandum of Association of a Private Company?
Ans: - Two members are required for the
Memorandum of Association of a private company.
Q. When can a private
company commence business?
Ans: - A private
company can commence business after obtaining Certificate of Incorporation.
Q. When can a public
company commence business?
Ans: - A public company can commence
business after obtaining certificate to commence business.
Q. What document specifies
the objectives of the company?
Ans: - Memorandum of Association specifies
the objects of the company.
Q. Name the document
called ‘Doctrine of indoor management’.
Ans: - Articles of association
Q. Name the document
called ‘Charter of the Company’.
Ans: - Memorandum of association
Q. Which Clause
defines the powers of the Company?
Ans: - Object Clause
Q. Who is a promoter of a
company?
Ans: - A promoter is the person who does
the required work before the formation of the company for its incorporation. A
promoter plans and organises the business and fulfills all the legal
formalities so that new company can come into existence. It may be an
individual, a firm, an association of persons.
Q. Discuss the importance
of Memorandum of association.
Ans: - It is the foundation of a
business. It shows the capacity to contract of a company. It is constitution of
a company which relates with the outside world. No company is allowed to temper
with its contents without the sanction of Central Government or court of law.
Any act of the company outside the scope of activities as laid down in the
memorandum is said to be ultra vires and non binding on it.
Q. What is Return on
Allotment?
Ans: - Return on Allotment is a statement
consisting of all the details related to the allotment of shares .It is signed
by directors. It has to be filed by registrar within 30 days of allotment
Return of allotment gives the following information:
- Name and
address of the shareholders
- Number
of shares allotted to each of them
Q. What is certificate of
Incorporation?
Ans: - Whenever the promoters apply for
the incorporation he has to file a lot of documents with the registrar of the
company. If the registrar gets satisfied he issues the certificate of
incorporation. A certificate of Incorporation is a certificate issued by the
Registrar of the companies that company is incorporated. With this certificate
the company becomes a separate legal entity.
Q. What is
Prospectus? What is its importance?
Ans: - Prospectus is the circular or
invitation given to the general public to subscribe to the shares of the
company or invest money in the company.
Importance
of Prospectus: A prospectus serves the
following purposes
i.
It is an invitation to the public to subscribe to the shares and
debentures of the company.
ii.
It informs about the background and future prospects of the
company.
iii.
It informs the general public regarding the business policies and
programmes of the company.
Q. Give any two privileges of Private ltd. Co. over Public Ltd.
Company.
Ans:
- (i) it can commence business after obtaining the certificate of
incorporation.
(ii) No compulsion to issue
Prospectus.
(ii) No compulsion to maintain index
of members.
Q. What is meant by
Incorporation of a company?
Ans: - Incorporation of a company means
the registration of company as a corporate body under the provisions of
Companies Act 1956.A Company comes into existence from the date of
incorporation.
Q. What are the stages in
the formation of a company?
Ans: - There are four stages in the
formation of a company:
- Promotion
- Incorporation
- Subscription
of Capital
- Commencement
of Business.
Q. What is meant by
promotion of a company?
Ans: - Promotion means conceiving a
business opportunity and translating it in the form of a new company. Promotion
includes the preliminary work of the formation of the company. It laying down
the foundation of a company for its incorporations. It plays the most important
role in giving birth to the company.
Q. Mention the steps to
be taken to obtain certificate of commencement.
Ans: - To commence a business a public
company has to obtain a certificate to commence business .Following documents
have to be filled with the registrar of the company :-
i.
Prospectus
ii.
Declaration that amounts of
minimum subscription has received in cash
iii.
Declaration regarding
qualification shares
iv. Return on Allotment
v.
Declaration that the
company has applied for the listing of its shares in a recognised stock
exchange
vi.
Statutory declaration
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